Alexander Pershikov, the transportation evangelist, founder of GetTransfer.com, serial entrepreneur and a metaverse visionary.
Ordering a transfer is an essential part of traveling for many voyagers. Now, with the rival car rental market facing supply shortages, it is becoming even more popular. But the private transport market has its own issues that will need to be solved to overcome the global economic recession and satisfy customers. Problems create opportunities, and market leaders can offer some necessary and promising steps toward the needed evolution.
Crisis And Opportunity
The car rental market in the U.S. is currently experiencing a crisis because of the Covid-19 pandemic, just like many other sectors of the economy. In 2020, rental car companies had to sell off as many cars as possible to reduce costs and survive. In 2021, renting a car became dramatically more expensive, and soaring prices look to continue.
At the same time, far more American travelers are planning summer trips than they did in 2020 and 2021. So, people are eager to hit the road, and eventually, the demand for transportation services will increase. The escalation of prices for gas and rental cars may lead people to reconsider their car habits during traveling to reduce expenditures. In this context, private transportation services may start to look like a money-wise solution.
The global mobility as a service (MaaS) market is predicted to reach $41.6 billion by 2030. Despite economic and social changes, people will keep turning to transportation services. Transfer companies can take part in this opportunity, but the future success of each transfer business depends on its strategies.
The Pricing Problem
One of the most important current issues in transportation services is the lack of pricing transparency, discouraging customers. Overcharging in taxis or rideshares is a common issue, even for locals who might expect to have a clear picture of transport prices in their city. Keep in mind that a large percentage of the ride price goes to aggregators, and prices can get even higher when cars exit dense areas like city centers. Private transfer companies’ price per mile is significantly lower, which is how they compete with taxis, but the markup might be up to 300%. Tourists, in particular, are stuck overpaying all the time.
With the current rate of inflation, many service providers prefer to take the easy way out, raising prices and covering up overcharges as “unavoidable measures.” But travelers don’t want to overpay, and they are affected by the economic situation as well, attempting to be more thoughtful about their money. Both sides can empathize: Drivers want to make decent money and provide for their families as much as tourists don’t want to be overcharged.
The Solution Is Already Here
To overcome the overcharging issue and win customers’ trust, transfer services should consider shifting to the marketplace business model (used by giants like Amazon and eBay, as well as my own company), which has been transforming the travel industry for a while now. The marketplace model allows the customer to request and then choose between offers from many different vendors (hotels, flights or drivers, in the case of transportation). Using this model, customers can easily determine whether they are treated fairly. The metasearch business model (used by sites like Booking.com) is another option gaining popularity with travelers. Metasearch technology has been used for years to buy airline tickets or book accommodation, but it can also apply to transportation.
Building trust with customers requires a clear system of reporting additional costs (taxes, road fees, etc.). Good marketplace and metasearch business models solve this issue by displaying all fees, as well as other data like inventory and driver ratings, before customers book. Finally, I suggest making life even easier for your customers by letting them pay less when they book in advance. These new models have had a positive impact on the travel industry, making it more welcoming to travelers. All travel businesses, especially transportation and transfer services, should consider how they can reassure customers that they will be treated fairly.
